Change of regulations for reporting income paid abroad (No. 997)

As of January 1, 2021, the amendment to the Act on Income Taxes has brought, among other things, changes in the sphere of reporting income that is paid abroad. The obligation to provide a notification applies not only to the income from which the tax was actually deducted, but also to the income, which is exempt from tax (e.g. profit sharing or dividends meeting statutory requirements) or which is not subject to taxation at all in the Czech Republic, in accordance with an international agreement (e.g. interest paid in respect of some countries).  

From January 1, 2021, the limits are increasing for notifying exempt income and income that is not subject to taxation in the Czech Republic. If the amount of the same type of income paid (e.g. interest, profit shares, or license fees) does not exceed CZK 300,000 (previously CZK 100,000) for a calendar month, this income does not have to be reported at all.

Recently, the taxpayer also declares revenues, which are exempt or not subject to taxation in the Czech Republic, by 31 January of the calendar year following the calendar year in which he would be required to deduct tax if the income was not exempt and was subject to taxation in the Czech Republic.

These changes do not apply to income paid or settled until January 2021.

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publikováno 26.02.2021